Why do gas stations require a ZIP code for card payments while almost no other type of (physical) merchant requires this verification?
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It’s a minimal verification that you’re not using a card that was lost or stolen. You know at least *that* much about the card’s owner.
For other uses, you generally have to “sign” something to charge some amount, even if it’s just making a squiggle on the pad.
Just to add, it only asks ZIP code for credit card payment, using a debit card will prompt you for your PIN.
But yeah, it’s just a small security measure, and you can’t really do signatures on a pump unless the screen was a touchscreen, and even then I probably wouldn’t want to touch it.
It’s very tedious if you have a foreign card, it refuses to accept that you don’t have a zip code. So much of the country can’t cope with non-US cards, phone numbers, etc, it’s very annoying as a visitor.
I work in the industry. The reason is it is good to verify the card belongs to you. If someone steals your card or clones it it is likely they won’t know your billing zipcode.
Stolen credit cards are more commonly used at gas stations than other merchants. It’s likely just a reaction
Is that a regional thing or only at specific gas stations? I gassed up quite a few times in California and Florida and always paid with credit card, never encoutered that.
My wife had her purse stolen out of her car. One of the things we learned as we cancelled the cards (as penny-level charges at gas stations showed up one by one) is that the thief will attempt to buy tiny amounts of gas…solely to determine if the card is still valid.
It was not too long after this that we started to have to enter our zip code at the pump. Not a bad idea, but it would have been easily subverted in my wife’s case (as they also had her ID in the purse).
After a credit card is stolen, thieves will often buy gas with it first, to confirm the card is valid. They can try multiple stolen cards at the pump to find a working one without a clerk getting suspicious, there are no cameras monitoring their face at the pump (unlike a checkout, which are frequently monitored by video), and it’s fast. So the payment processor for the gas station requires you to verify your zip code matches the one registered to the credit card before it lets you buy gas.
Once the card is verified valid, they will then either run to a store and use it, or they have a cloned version of the card already with a partner who will quickly check out with a bunch of high value goods at an electronics or department store before bank security catches on and flags the card.
Cloning, by the way, is why more merchants and banks are requiring chip. If your card number has chip capabilities, and the store has chip processing capabilities, the card verification process will force the merchant to use the chip reader. This protects you from your card being cloned, which is just a direct copy of the magnetic stripe on the card. The thieves can’t readily clone your chip with today’s technology.
So. Anyway. That’s why gas stations requires your zip code.
Gas is a type of item that once dispensed, its impossible to get back nor would you want to due to contamination reasons. By verifying the zip code, it proves the card wasnt stolen as you can run it as credit
Credit card companies are on high alert for fraud at gas stations. Zip code verification is one thing they do. They also monitor the number of transactions. I once filled up twice at the same station – paid for gas for two cars since we were traveling together. Credit card company sent a text message to me of suspected fraud.
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